U.S. consumer sentiment slipped to its lowest in six months in March, as worries about declining stock prices and the health of the housing market shook consumer confidence in the economy, a report showed on Friday.
The Reuters/University of Michigan Surveys of Consumers said its preliminary March reading on the consumer sentiment index slipped to 88.8, down from 91.3 in the previous month.
The reading came in below a median forecast of 90.0 in a Reuters poll of 61 analysts.
Economists said the soft reading was likely the result of a recent sharp drop in stock prices and a rise in the price of gasoline, factors that could depress consumer sentiment further in coming months.
“The numbers aren’t yet too bad, but they will deteriorate,” Ian Shepherdson, chief U.S. economist at High Frequency Economics wrote in a note, adding that he expected consumer sentiment data to drop “significantly further.”
Financial markets showed little reaction to the survey, with stock, bond prices and the dollar all holding largely steady after its release.
The survey’s gauge of current consumer conditions was 103.6, down from 106.7 in the prior month and also the lowest in six months. The index of consumer expectations was 79.3 compared with 81.5 at the end of February.
Consumers were three times as likely to report hearing negative rather than positive news on the economy, the survey said, citing job losses, declines in stock and home prices, and higher mortgage delinquencies.
“What has changed is consumers’ overall evaluation of the economy, as consumers are now more likely to report bad rather than good times in the economy as a whole,” a statement accompanying the survey said.
The survey also said that the overall decline in sentiment was concentrated in upper-income households but was “not consistent with an emerging downturn.”
The survey’s one-year inflation index stood at 3.0 percent in March, unchanged for a third straight month, while the five-year inflation index stood at 2.9 percent, unchanged from late February.
The Reuters/University of Michigan Surveys of Consumers, a monthly series of data on U.S. consumer sentiment, are produced by the University of Michigan in Ann Arbor.